Mumbai: The Securities Appellate Tribunal (SAT) has cleared the Bhushan group’s open offer for an additional 20% in Orissa Sponge and Steel stating the group has not violated the takeover codes.
The SAT order sets aside a Securities and Exchange Board of India’s (Sebi) order passed in January that penalized Bhushan group and unlisted BNS Tour and Travel.
The capital market regulator Sebi had slapped a Rs450,000 fine on both the companies.
According to Sebi, Bhushan group and BNS Tour together held over 17% in Orissa Sponge as of 29 January 2009, but did not make a public offer within four days as required by regulations.
According to Indian takeover code, 15% stake acquisition in a company triggers open offer for 20% more in the target company.
According to the SAT order posted on the Sebi website, Bhushan had sold off its stake in BNS to the Jain group as early as October 2008 and hence did not breach takeover code.
As a result Bhushan’s stake in Orissa Sponge was below the threshold limit of 15% on 29 January, SAT said.
Bhushan had announced plans to raise stake in Orissa Sponge in late February 2009.
“The impugned order cannot be sustained,” SAT said.